A Handful Of Immigrants Can Double The UK’s Economy
Our migration debate hardly mentions ‘immigrant founders,’ yet I believe they hold the key to the future of the UK’s strategic tech industry, and the UK economy by extension.
In the US, especially Silicon Valley, immigrants have created a tech ecosystem which is the world’s envy. A 2007 UC-Berkeley study in the US reported 52% of Silicon Valley companies were founded by immigrants. Indian entrepreneurs, less than 1% of the population, created 13% of all tech companies. Absolutely astonishing numbers.
It’s not just start-ups. 40% of the US Fortune 500 were started by immigrants. The greatest tech companies today simply wouldn’t exist without immigrants: Tesla (Elon Musk – SA), Google (Sergey Brin – Russia), Intel (Andy Grove – Hungary), eBay (Pierre Omidyar – France), Apple (Steve Jobs – son of a Syrian immigrant), Microsoft (Satya Nadella – first generation Indian CEO). Plus Yahoo, nVidia and dozens others. Immigrants have created $3 Trillion+ of value in US tech alone, larger than the UK’s entire economy.
As an immigrant myself working in UK tech, I see first-hand its value in our ecosystem. A 2016 study showed 25% of UK tech founders were immigrants. The fascinating thing about London is immigrants don’t just come from the EU, they are lured increasingly from the US, India, and further afield. We have been set up to compete exceptionally well for talent everywhere.
Yet there are sobering lessons. As the US has recently tightened immigration (and cut H1-B ‘genius visa’ numbers), the proportion of companies started by immigrants has fallen. It’s too early to tell how negative this will be, but losing even a few hundred hungry entrepreneurs willing to move thousands of miles to create a business can only destroy value in my view. And even if the reality still enables the ‘right kind’ of immigration, the perception of ‘being less welcome’ is proving a powerful deterrent.
India has meanwhile woken up to the value of keeping its best talent. At its famed IIT, only 200 of 10,000 graduates now move abroad, far below a decade ago. Indian companies are aggressively courting the best graduates, fighting the war for talent on home soil. France has meanwhile opened its doors to highly-skilled immigrants, aiming to beat the UK as a top destination for skilled engineers. Berlin is also very aggressive about attracting foreign tech talent.
Great talent is everywhere. Each year perhaps a few thousand people are prepared to leave India, China, Brazil or elsewhere to make their fortune in the best market they can find. Even though they are proven creators of trillions of dollars of value, they face a closing door in the US, an uncertain environment here, and wide-open doors elsewhere. Being unsure how things will play out here, many will opt to move elsewhere. The cost to all of us could easily be £100 billion+; far, far, greater than any cost for 100,000 net annual migrants from peripheral European countries.
In immigration, we are on course to win the battle, but be routed in the war.